The Anatomy Of Hotel Marketing

It recently occurred to me that technology and the industry are moving much faster than property providers’ ability to assimilate and work with it. With this in mind let’s try to explain how hotels and vacation rentals managers can use industry tools to drive sales. First of all what are the main tools and who are the main players?

Here are the tools:

Property Management System (PMS) – A PMS assists in the management of customers, customer payments, invoicing, housekeeping, maintenance, and in some cases contact with property owners. The purpose of the PMS is to assist a hotelier or a vacation rental operator to work in one place and control all aspects of his business. To some degree they succeed but still a lot of work needs to be done outside the system to be successful.

Channel Manager – A way of uploading your pricing and availability to multiple online travel agencies (OTA) so they can display your properties only when they are available and for the correct price so instant booking can be made. In most cases a hotelier will not have to work with the channel manager. He will work with his prices and availability in the PMS and the PMS will automatically work with the channels.

Accounting Software – Usually your accountant will have legally approved software that he works with to submit your annual accounts. If you work with a particularly good PMS it will export your sales data into the accounts software (probably with a lot of tweaking).

Payment Gateway – A cloud based software which allows the PMS to take payments. Sometimes in its own name and sometimes in the name of the property provider. The payment gateway is plugged into the PMS and will work with payment providers such as banks or Paypal. And the players:

And Here are the Players

Hotelier – We all know who this is.

Vacation Rental Owner – the owner of one or more vacation rental properties. He may or may not operate them himself

Property Manager – This term can mean anyone who needs bookings for their property: A hotelier, a vacation rental owner who operates a few of his own properties, or it could also be a company which does it for him, and it is also used for an agency that collects many properties in one location onto a website and sells them as if they are their own.

Online Travel Agency (OTA) – This can mean any web portal which specializes in driving sales of properties managed by hoteliers, vacation rental owners and property managers. Think Booking.com, Expedia, Opodo.
[divider]
Ok now we got that out of the way, let’s see why hoteliers, vacation rental owners and other property managers get confused:

A PMS is not a Silver Bullet

PMS providers, in an attempt to sell their software, (and let’s face it, it’s not cheap), tell property managers that the integrated channel managers will bring them many sales. Hooked by this promise the property manager duly signs up and starts using the system only to find no sales are forthcoming. Now this is not necessarily the fault of the PMS provider – well maybe a little.

Setting up the Channel Manager

What the property manager did not get told was that he needs to have an existing account with each OTA (Booking.com, Expedia etc) for the channel manager to work. In order to do this, with OTA each he wants to work with he needs to sign up for an account, persuade the OTA to work with him, upload images and descriptions of his properties, set up pricing of all his room or property types and then fill identical room type information into the PMS so that the PMS can sync with the OTA sales channel.

Setting up the Payment Gateway

The same applies to the payment gateway. Whilst it’s easy to sign up for a payment gateway, if the property manager presents a payment risk, getting an account can be hell. If the property provider takes even 1$ as a deposit on a property from a customer he is responsible for the whole stay, even if it is $20,000. Such are the rules of the payment clearing systems. This may not be a problem for hoteliers but it most certainly is for intermediaries. The payment gateway will work with the provider to take payments in a way so as to minimize risk.

Setting up the Accounting

If a property manager wishes to export data to his accounting software it helps if he sets up cost centres and tax rate properly within his PMS before beginning to enter data. Export is also likely to be problematic if the export function is not designed specifically for his accounting software.

Now in case you had not noticed, I’ll just spell it out. This is A lot of work that the property manager was not told about. A PMS is not a silver bullet. It’s a great tool but it’s not plug and play. At least not yet….Rentals United is working on that one.